Anti-EU
protesters hold Greek national flags on the Tomb of the Unknown
Soldier in front of the parliament building during a
demonstration of about five hundred people in Athens, Greece July
13, 2015.Reuters

In a note from economist Fabio Balboni, HSBC warns that the
refugee crisis, along with its humanitarian costs, could also be
very costly for Greece when it comes to making a large repayment
on its bailout in July.

The closure of the Western Balkans route means there are now
almost 50,000 refugees stuck at the Greek border. This adds to
the fiscal costs for the government, and is also exposing the
divergences between Syriza and the junior party in government,
far-right Independent Greeks. A deal was struck on March 18
between the EU and Turkey to send the refugees back to Turkey,
but implementation could take time, and it is uncertain whether
it will be enough to stem the influx of migrants.

One of the big concerns facing Greece, HSBC says, is that the
biggest debt repayment the country will have to make in 2016
comes in July, when a combination of bailout repayments and
interest payments to both the ECB and the IMF worth more than €3
billion is due. That, as HSBC points out, coincides with the
period of the year when the inflow of refugees was reaching its
highest peak in 2015.

If this influx happens again, it could cause big problems. As
HSBC writes: "Tensions could reach a peak by the summer,
when Greece has to repay some €3 billion in debt and interest to
the ECB (July 20), and when last year the influx of migrants was
at its highest."

Here's are the charts:

HSBC

HSBC

One of the big problems, HSBC says, that the refugee crisis could
cause to Greece is that it may end up costing the country far
more than is currently expected. Here's HSBC again (emphasis
ours):

Recognising the risk of a "brewing humanitarian crisis," the EU
has agreed to implement a new set of measures to support Greece.
This entails €700 million of funds over three years, of
which €300 million (0.2% of GDP) in the first
year, promising that funds will be mobilised "as quickly as
possible." However, the Greek Central Bank governor
Yannis Stournaras had previously warned of costs of €600 million
this year, adding that "that estimate was based on the
presumption that Greece was only a transit nation, but if now we
have to host a large number of refugees" and it "will have to be
revised" as more people could end up staying in Greece.

German government estimates suggest that each refugee in Germany
requires support of around €13,000 a year. If arrivals continue
at the current rate and the Western Balkans route remains closed,
the costs for the Greek government could reach €4 billion
(2% of GDP) per year by the summer, much higher than Mr
Stournaras’ initial estimate.

So instead of costing €600 million, the refugee crisis may cost
more than €4 billion this year. For a country that is in the
middle of a debt crisis, that could be very bad news. As HSBC
puts it "a further deterioration of the refugee crisis in Greece
would put additional strain on its public finances, making it
even harder to implement the programme." The bank adds that
unless "a permanent and coherent solution to the crisis" is found
"Greece could end up paying a very high price."